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Federal government unable to determine full extent of improper payments

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Federal agencies made about $247 billion in payment errors in fiscal year 2022, but some agencies are reducing improper payments.

Improper payments either should not have been made or were made in the wrong amount, according to a report from the U.S. Government Accountability Office. Improper payments have been a longstanding problem for federal agencies. Since 2003, cumulative executive agency improper payment estimates have totaled almost $2.4 trillion, according to the U.S. Government Accountability Office.

Some agencies have reported declines in improper payment rates. Four of the five programs with the largest reported reductions were from the U.S. Department of Veterans Affairs.

The Government Accountability Office identified 19 programs across eight agencies with reported reductions in improper payments, according to fiscal year 2022 reporting. The reduction in estimated improper payment rates ranged from 0.1 to 85.6 net percentage points. The reported improper payment estimates for the 19 programs declined from a total of about $55 billion for fiscal year 2017 to $44.5 billion for fiscal year 2022, according to the report.

Agencies are supposed to seek out the root causes of improper payments and make changes to reduce them.

“These actions and efforts fell into two categories. The first category – establishing accountability and facilitating internal collaboration – included examples such as the VA Veterans Health Administration’s establishment of program-level senior accountable officials and a payment integrity team,” according to the report. “The second category – providing technology, tools, and training targeted to root causes – included examples such as Federal Communications Commission’s launch of the National Verifier system, which uses a combination of automated and manual processes to verify Lifeline program eligibility.”

Still, improper payments remain a significant problem for the federal government.

Estimates of improper payments totaled about $247 billion government-wide in fiscal 2022, that’s a decrease of about $34 billion from the prior fiscal year, but it was an increase of more than $40 billion from fiscal year 2020.

“We have identified improper payments as a material deficiency or material weakness in internal control in our audit reports on the U.S. government’s consolidated financial statements since fiscal year 1997,” according to the report. “Specifically, we note that the federal government is unable to determine the full extent to which improper payments occur or to reasonably assure that appropriate actions are taken to reduce them.”

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